New Delhi: Securities market regulator SEBI has found that the NSE had engaged in activities unrelated to its core activities as a stock exchange by acquiring stakes in several companies, including Power Exchange India Limited (PXIL) and Computer Age Management Systems Pvt Ltd (CAMS), and imposed a consolidated penalty of Rs 6 crore.
The SEBI order said that through an email dated July 5, 2018, it had directed the National Stock Exchange of India (NSE) to submit details with regard to stakes, shares and rights held by NSE or through its subsidiaries and the SEBI approvals in this regard.
In response, the NSE submitted requisite details through its email dated July 10, 2018 and October 30, 2019.
Regarding NSE’s reply on investment in PXIL, SEBI noted that the NSE contention that activities of PXIL are related to the activities of a stock exchange was not found acceptable as the activities of PXIL include providing electronic exchange for trading of power by its members — power generators, distribution utilities among others — and is entirely different from NSE, which is for the purpose of assisting, regulating or controlling the business of buying, selling or dealing in securities as specified in Securities Contracts(Regulation) Act, 1956 that do not cover product as traded on PXIL. Also, the products traded on PXIL and NSE fall in different domain.
“Further, submission of NSE on ‘engaged’ in the activities of PXIL was also not found acceptable by SEBI as NSE is one of the promoter in PXIL and has acquired shareholding as well as nominated directors in the Board of PXIL through which it had engaged in the activities of PXIL,” the SEBI order said on Thursday.
